Marriott’s Q2 earnings revealed both a larger-than-expected loss as well as expectations for a swift recovery in China.
On Monday, Marriott President and CEO Arne Sorenson said in a statement that he expects China’s occupancy and RevPAR levels to return to their 2019 numbers by next year, noting that in early May all hotels in the region were open, with occupancy levels now hovering at 60%.
Marriott’s second-quarter earnings fell short of expectations for analysts at Baird Equity Research, primarily due to lower fee revenues and higher-than-forecasted pandemic-related charges. However, the firm noted that net liquidity for the company “remains solid” at US$4.4 billion and that July RevPAR trends are encouraging.
For the second quarter, Marriott’s reported operating loss totaled US$154 million, compared with 2019 second-quarter reported operating income of US$409 million. Reported net loss totaled US$234 million, compared with reported net income of US$232 million in 2Q 2019. Adjusted earnings before interest, taxes, depreciation and amortization was US$61 million, down from US$952 million in the same period last year.
Reported results for the quarter included impairment charges and bad debt expense of US$77 million pretax, related to COVID-19.
Marriott, whose shares are down 40.3% this year, also reported an 84.4% drop in RevPAR, according to reporting from CNBC.
The company’s pipeline “remains strong,” according to Sorenson, with approximately 510,000 rooms, 45% of which are under construction.
